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PAYE etc for 10 hours p/w?

(5 Posts)
Chloris33 Fri 18-Nov-16 22:13:13

I'm probably about to employ a nanny to look after my son 10 hours a week. She said she charges £12 an hour, which I'm presuming is gross. I'm going to have to check with her, but it sounds likely that her earnings with us will not exceed her personal tax allowance. .I guess I still need to register with HMRC and go through PAYE. What is the extra expense involved likely to be (on top of the gross rate p/h)? I'm new to all this.

nannynick Fri 18-Nov-16 23:49:29

Do not assume it is gross. As the employer you decide the salary so you could make the offer gross and see what the nanny says.

You will need to declare to HMRC as over the Lower Earnings Threshold for National Insurance. You will need to deduct Income Tax if this is not their only employment. Employers National Insurance will depend on the gross salary so you need to confirm that the pay amount being agreed is gross.

nannynick Sat 19-Nov-16 10:45:11

If you agree £12 gross per hour, or even £12 net per hour, the Employers NI is zero if they work 10 hours per week. What will change is the Income Tax.

nannynick Sat 19-Nov-16 12:48:39

Some costs to think about.

Using a nanny payroll company to calculate the payslips and remind you of when to pay HMRC, plus provide you with any help you need regarding employing a nanny... £180-£276. You won't need to provide a pension scheme at this time as you are a new employer, you will need a scheme in place for 2018. www.nannypaye.co.uk www.nannytax.co.uk and others provide nanny payroll services.

Contract of employment... either use a template document such as from www.nannyjob.co.uk but do make sure you know how to write contracts as template documents do tend to need some adaption, or the nanny payroll provider will be able to provider a bespoke contract (cost varies).

Your nanny will be entitled to a minimum of 5.6 weeks paid holiday. So 5.6 x 10 hours = 56 hours of paid holiday per year. You can dictate when all that occurs but it isn't very nice to do that, so what often happens is that you decide some and nanny decides some. Consider if they will ever be needing to work on a Bank Holiday, if not and if that occurs on their normal working day then they take it off as part of their annual leave. Is the 10 hours all one day, or is it spread over several days?

Employers liability insurance - you should already have this as part of your home contents policy, check the wording. If not, then it is available as a separate product for around £100 a year though do check with your home contents provider first as they may be able to add it to your existing policy for less.

Consider any non-taxable payments such as nanny using their car to transport your son. Mileage rate up to 45p per mile is non-taxable. Mileage rate is only payable on work travel, not the commute to/from place of work.
Also look at activity costs - toddler groups, swimming, museums & castles, whatever nanny will be doing with your son.

Chloris33 Sat 19-Nov-16 17:28:07

That's really helpful, thanks so much x

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